Which of the following is an example of a speculative attack on a currency?
a. National governments decide to engage in competitive devaluations against a given country.
b. International organizations such as the WTO and the IMF attempt to reorder the currency's system.
c. Private investors sell domestic currency and buy foreign currency, betting that the domestic currency will soon be devaluated.
d. Casinos in Las Vegas allow the proliferation of bets for and against a given currency.
e. A country is at war, and the enemy country "freezes" all the accounts denominated in the local currency.
c
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Define the following four references and name a country that you argue would fall into each category
(a) First World (b) Second World (c) Third World (d) Fourth World
Corporations can finance their activities through the sale of new stocks but are legally prohibited from selling bonds.
Answer the following statement true (T) or false (F)
Ryan experiences an increase in his wages. The hours of labor that he supplies to the market would increase if
a. the income effect is larger than the substitution effect. b. the substitution effect is larger than the income effect. c. neither the income effect nor the substitution effect apply to Tom's labor-leisure tradeoff. d. Ryan views both labor and leisure as inferior goods.
Suppose three roommates cannot agree on the size of a pizza to order. Domino argues for a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar wants a super-large pizza. Assuming no paradox of voting, majority voting will
result in a decision to order: A. a medium pizza. B. a large pizza. C. a super-large pizza. D. two medium pizzas.